The cost of carrying it
Interest on the US National Debt
The United States now pays $1.38 trillion a year just in interest — more than it spends on national defense.
Interest accrued so far today (estimate, UTC)
Interest accrued so far today (estimate, UTC): $0.00 trillion
Per year
$1.38 trillion
annualised from fiscal FY 2026 to date
Per second
$43,827
paid, in cash, continuously
Per citizen, per year
$4,047
before a single program is funded
Share of federal revenue
26.2%
of every tax dollar collected, this goes to lenders
What that buys instead
Annual federal outlays, approximate, for scale. Interest is not a program anyone voted for — it is the price of decisions already taken.
Program figures are approximate FY2025 outlays from the Monthly Treasury Statement, shown for scale rather than as exact budget lines. The interest figure is live.
Average rate paid
3.490%
weighted across all interest-bearing Treasury debt
Interest, fiscal YTD
$1.27 trillion
reported through 2026-08-31
Debt outstanding
$40.05 trillion
the principal all of it is charged on
Why the interest bill exploded
Two things happened at once, and the combination is what did the damage. The debt itself grew, and the rate paid on it roughly tripled from the near-zero decade that followed 2008.
The second effect is the one people miss. Treasury debt is not borrowed once at a fixed rate — it is constantly rolled over as bills and notes mature. Every rollover reprices old cheap debt at today’s rate. The average rate across all interest-bearing debt is currently 3.490%, and it is still climbing as the last of the cheap paper matures.
This is why the interest line moves even in a year when new borrowing slows: a large share of the existing stock reprices annually regardless.
The part that compounds
Interest is paid by borrowing more. There is no separate interest fund — the payment is financed out of the same deficit, which is financed by issuing more debt, which accrues more interest.
That is the definition of a compounding loop, and it is why economists watch interest as a share of revenue rather than the headline debt number. Currently it is 26.2% of everything the federal government collects. Sustained readings above roughly 20% are historically where lenders begin demanding a risk premium — which raises rates, which raises interest, which is the loop tightening.
Is there a way out?
Arithmetically there are four, and only four: grow the economy faster than the debt, run a primary surplus, inflate the real value of the debt away, or default. The first is painless and historically how the US exited its post-war debt peak. The second is politically brutal. The third is a tax on savers that no one has to vote for. The fourth is not seriously on the table for a country that borrows in a currency it issues.
Which of the first three is being chosen — deliberately or by default — is genuinely the whole debate.
Common questions
How much interest does the US pay on its national debt?
About $1.38 trillion a year, annualised from fiscal year FY 2026 Treasury reporting. That works out to roughly $43,827 every second, or $4,047 per citizen per year.
Is interest on the debt bigger than the defense budget?
Yes. Annual interest on the federal debt now exceeds annual national defense outlays, which run around $900 billion. Interest has become one of the largest single line items in the federal budget, behind only Social Security and health programs.
Why did the interest bill rise so fast?
Two effects compounded. The debt itself grew, and the average interest rate paid on it roughly tripled from the near-zero era after 2008. Treasury debt is constantly rolled over as bills and notes mature, so each rollover reprices old cheap borrowing at current rates. The weighted average rate across all interest-bearing debt is now about 3.490%.
What share of federal taxes goes to interest?
Roughly 26.2% of all federal revenue currently goes to interest payments, before any program is funded. Economists watch this ratio more closely than the headline debt total, because it measures what the debt actually costs each year rather than what it totals.
Interest is what makes the debt compound: it is paid by borrowing more. Debt to GDP shows whether the economy is outgrowing that loop, and the debt ceiling explains why fighting over the payments costs extra on top.